Luxury property owners throw in the towel after extremely dismal Q1

Posh homes were sold at loss-making prices.

A number of luxury homeowners who had been previously holding out for higher property prices had finally thrown in the towel in the first quarter of the year.

A report by Colliers noted that a number of luxury and super-luxury homes were sold at loss-making prices in Q1, as prices of luxury and super-luxury apartments slipped 3.7% to average at $2,746 per sq ft by the end of March 2015.

“Some homeowners who were previously holding out for higher prices also softened their stances. This is particularly evident in owners of luxury and super-luxury homes, especially those with multiple properties acquired in 2007 at the peak of the property boom before the financial crisis,” stated Colliers.

For instance, a 2,626 sq ft luxury condominium unit at The Coast at Sentosa Cove was sold in January for about $3.13m or just $1,190 per sq ft.

This price is about $1.21 million below the original purchase price of $4.34 million or $1,653 per sq ft that the seller paid in March 2007, according to the URA’s Real Estate Information System (REALIS) caveats.

Another stark example was the sale of a 6,017 sq ft two-storey penthouse at St Regis Residences on Tanglin Road, which was sold in February at a price of $12.20m.

The seller booked a loss of $15.80m, the biggest loss ever made on an apartment sale in Singapore.

“Prices of luxury and super-luxury apartments that have moderated by some 7.4% in 2014 and 3.7% in 1Q 2015 may slide by a steeper 10% to 15% in 2015,” warned Colliers.